Cb Financial Services, Inc. · NASDAQ:CBFV
Cb Financial Services — Investor Presentation (January 2023)
61 slides from Cb Financial Services's investor presentation, January 2023
Slide 1: Financial Services, Inc. Investor Presentation January 2023
Financial Services, Inc. Investor Presentation | January 2023
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Statements contained in this investor presentation that are not historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and such forward-looking statements ar
Slide 3: Mission Statement
Mission Statement “ We partner with individuals, businesses and communities to realize their dreams, protect their “ financial futures and improve their lives CB Financial Services, Inc. (Nasdaq: CBFV) January 2023 Page 3
Slide 4: Investment Summary
Investment Summary Market Presence with Brand Recognition Seasoned Executive Serving Stable Southwestern PA & Leadership Ohio River Valley markets Proven experience through all economic cycles Rewarding Shareholders Stable quarterly dividend and active share repurchase program Deploying Technology t
Slide 5: Corporate Overview
Corporate Overview Headquartered in Southwestern, Pennsylvania Founded in 1901 Community Bank (the "Bank"), the wholly-owned subsidiary of CB Financial Services, Inc. operates ten offices providing a wide range of banking services in Greene, Allegheny, Washington, Fayette, and Westmoreland Counties
Slide 6: Share / Trading Information
Share / Trading Information CBFV Share Price $21.57 Shares Outstanding 5.1M Public Float 4.6M Market Cap 109.8M Total Stockholders' Equity $110.2M Book Value per Common Share $21.60 Tangible Book Value per Common Share (1) $19.00 Price to Book Value 0.99x Price to Tangible Book Value (1) 1.13x P/E L
Slide 7: Diversified Business
Diversified Business ▪ Well-positioned to serve the needs of small and medium-sized businesses across our footprint Commercial Banking ▪ Growing presence within the Pittsburgh MSA ▪ Strong asset quality ▪ Branch optimization completed in 2021 Retail Banking ▪ Currently operating in Southwestern PA a
Slide 8: 2023 Macro Outlook
2023 Macro Outlook Expectations are that the Federal Reserve will raise rates further during 2023, leading to continued moderation of economic conditions with a resulting mixed impact on CB Item Comment Market pricing began to rise during Q4 and we expect that will continue; Deposits Corporate wide
Slide 9: Attractive Operating Market
Attractive Operating Market Pittsburgh Metropolitan Area Large, Diverse Market • 2.4 million people, including surrounding counties, with a median household income at $50,536(1) • Large market for energy, healthcare, technology, and manufacturing companies Large Employers in Operating Area • Fortune
Slide 10: Revenue Generating Initiatives
Revenue Generating Initiatives We executed well against our revenue-oriented goals in 2022 and expect to continue that success through 2023 2022 Goals 2023 Goals p Add seasoned commercial and retail sales leaders tasked with driving growth p Continue investment in technology / applications to suppor
Slide 11: Executive Leadership Team
Executive Leadership Team John Montgomery Ralph Burchianti Jamie Prah Jennifer George President & CEO since August 2020 Senior Executive Vice President & Chief Executive Vice President & Chief Senior Executive Vice President & Previously Chief Credit Officer at First Credit Officer, Director since 2
Slide 12: Strong Q4 and FY Performance
Strong Q4 and FY Performance
Slide 13: Q4 2022 – Highlights of the Quarter
Q4 2022 – Highlights of the Quarter Strong quarterly performance, driven by operating leverage and strategic initiatives driving financial results Financial Performance Balance Sheet Strength Improvement in Multiple Key Metrics(1) Loan growth and Capital redeployment to shareholders continues • Net
Slide 14: FY 2022 – Highlights of the Year
FY 2022 – Highlights of the Year Solid execution and organic growth strategies, underpinned by durable expense reduction, resulted in bottom-line growth Goals Entering the Year(1) How We Did • Continue to drive smart growth in retail and commercial • Loans, excluding Payroll Protection Program (PPP)
Slide 15: Financial Update – Q4 2022
Financial Update – Q4 2022 2019 FY 2020 FY 2021 FY 2022 FY Q4 2021 Q4 2022 ($000s except per share) 12/31/19 12/31/20 12/31/21 12/31/22 12/31/21 12/31/22 • Diluted EPS (GAAP) for Q4 2022 was $0.81, compared to $1.31 in the prior year period Balance Sheet Total Assets $1,321,537 $1,416,720 $1,425,479
Slide 16: Quarterly Loan Growth excluding PPP loans
Quarterly Loan Growth excluding PPP loans Quarter End Loan Balances $1,100 $1,050 $1,050 $1,042 $1,024 $1,012 $996 $1,000 $950 Period ended balances excluding PPP loans were $1.05 billion at in millions $900 December 31, 2022 compared to $996.3 $850 million at December 31, 2021, an increase of 5.4%.
Slide 17: Core Earnings Growth
Core Earnings(1) Growth $6,000 $5,123 $5,000 $4,417 $3,927 $4,000 $3,297 $3,449 $3,460 After completion of the branch in thousands optimization in June 2021, there has been $3,000 continuous growth in core earnings from $3.3 million in the three months ended $2,000 September 30, 2021 to $5.1 million
Slide 18: Driving Margins by Controlling Costs
Driving Margins by Controlling Costs
Slide 19: Revenue Metrics Benefiting from Optimization Efforts
Revenue Metrics Benefiting from Optimization Efforts Improving Returns on Revenue per Full-time Employee Our Human Capital $280,000 $272,570 ▪ Total Interest and $260,000 Dividend Income, plus $245,865 Insurance $240,000 Commissions, continue to grow $220,000 $208,853 ▪ Completion of $200,000 optimi
Slide 20: Increasing Efficiency In Our Branch Networks
Increasing Efficiency In Our Branch Networks $1,350,000 $100,000 Branch Optimization $97,577 Efforts Yielding $90,000 $1,300,000 $91,131 Results $79,757 $87,615 $89,308 $86,799 $80,000 $80,488 $1,250,000 ◦ Reduced overall branch $70,000 locations from 22 to 13 during 2021 - 2022 $60,000 $ in thousan
Slide 21: Favorable Cost of Deposits
Favorable Cost of Deposits CB Has Maintained a Lower Average Cost of Deposits Versus Peers* Through the Most Recent Cycle 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2018 2019 2020 2021 Q1 2022 Q2 2022 Q3 2022 CB Peers Avg Fed Funds Rate * Peers include public and private Pennsylvania banks with total asset
Slide 22: Non-Interest Bearing Deposit Market Advantage
Non-Interest Bearing Deposit Market Advantage CB Has Maintained a Higher Non-Interest Bearing Deposit Compared to Peers Average* Through the Most Recent Cycle 35% 30% 25% 20% 15% 10% 2018 2019 2020 2021 Q3 2022 CB Peers * Peers include public and private Pennsylvania banks with total assets of $1 bi
Slide 23: Operating Leverage Benefiting From Optimization
Operating Leverage Benefiting From Optimization $17,500 $15,000 $12,500 $10,000 Total income is increasing while total in thousands expenses remain flat over the prior 5 $7,500 quarters, producing positive operating leverage. $5,000 $2,500 $— Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Core Income (1) C
Slide 24: Credit Insights
Credit Insights
Slide 25: Attractive Operating Markets ~ Less Recessionary Impact During Last Recession
Attractive Operating Markets ~ Less Recessionary Impact During Last Recession Home Prices and Unemployment in the Pittsburgh MSA Compared Favorably with Pennsylvania and National Average CB Financial Services, Inc. (Nasdaq: CBFV) January 2023 Page 25
Slide 26: Diversified Commercial Book Reduces Recession Sensitivity
Diversified Commercial Book Reduces Recession Sensitivity Credit Breakdown by Industry Office Space Senior Housing ▪ No loans are in deferral as of 12/31/2022 19.5% 5.3% Hotels 5.5% ▪ Exposure includes categories of CRE, Construction CRE, and C&I loans Oil and Gas 4.3% Restaurants 1.1% Total % of Ou
Slide 27: Indirect Auto Lending Supported by Prime Borrower Relationships
Indirect Auto Lending Supported by Prime Borrower Relationships Borrower Credit Score Bands Key Takeaways: > 800 • Indirect Auto represents 13.0% of our total 45.4% loan portfolio • Within Indirect Auto, 45.4% of loans are to borrowers with FICO scores of 800 or better at the time of underwriting •
Slide 28: Residential Real Estate Segment Characterized by Conservative LTVs
Residential Real Estate Segment Characterized by Conservative Loan to Value (LTVs) Borrower Loan to Value Bands Key Takeaways: > 100% 0.4% • Residential loans represent 31.5% of our total loan portfolio 90% - 99% 6.4% • Within our residential book, 28.9% of loans 80% - 89% carried an LTV of less tha
Slide 29: Returning Capital to Shareholders
Returning Capital to Shareholders
Slide 30: Shareholder Friendly Programs
Shareholder Friendly Programs Strong Capital Position Allows us to Maintain Shareholder-friendly Initiatives Completed $7.5 million repurchase program in Despite an Economic Uncertainty February 2022 308,996 Total Shares Average Cost $24.27 per share CB Financial has paid a regular quarterly dividen
Slide 31: Key Financial Metrics
Key Financial Metrics
Slide 32: Operating Initiatives Have Led to a High-Quality Balance Sheet
Operating Initiatives Have Led to a High-Quality Balance Sheet Total Assets $1,600 ◦ Continuing to focus on credit underwriting $1,416.7 $1,425.5 $1,408.9 standards $1,400 $1,321.5 ◦ Providing personalized customer engagement that leads to repeat and referral business $1,200 ($ in millions) ◦ Focusi
Slide 33: Loan Growth Trend and CRE Loan Composition
Loan Growth Trend and CRE Loan Composition Total Loans Expertise in Commercial Real Estate $1,100.0 (as of December 31, 2022) $1,044.8 $1,049.9 Other 1.9% $1,020.8 Commercial & $1,000.0 Consumer 14.0% Industrial 6.7% $952.8 Real Estate- Construction 4.3% $900.0 ($ in millions) $800.0 $700.0 Real Est
Slide 34: CRE Portfolio by Industry
CRE Portfolio by Industry Owner Occupied CRE Loans by Industry – $103.3M Non-Owner Occupied CRE Loans by Industry – $333.5M Warehouse Space Warehouse Space Office Space 14.9% Office Space 14.8% 11.1% 12.3% Manufacturing Medical Facilities 8.9% 6.3% Other Non-Farm/Non- Residential 16.9% Vacant Land 3
Slide 35: C&I Portfolio by Industry
C&I Portfolio by Industry C&I Loans by Industry – $69.9M Wholesale Trade Administrative and Support and Waste 4.5% Management and Remediation Services 3.7% Finance and Insurance Retail Trade 4.8% 3.7% Senior Housing Information 5.9% 3.7% Health Care and Social Assistance 3.6% Professional, Scientifi
Slide 36: Total Deposits and Deposit Composition
Total Deposits and Deposit Composition Total Deposits Deposit Composition (as of December 31, 2022) $1,400 $1,300 $1,268.5 $1,224.6 $1,226.6 Time Deposits $1,200 8.6% $1,118.4 $1,100 Non-Interest Bearing Savings Accounts Demand Deposits ($ in millions) $1,000 19.5% 30.8% $900 $800 $700 Money Market
Slide 37: Asset Quality Trends
Asset Quality Trends Non-Current Loans/Total Loans NCOs (Recoveries)/Average Loans 1.40% 1.01% 1.00% 1.20% 0.80% 1.00% 0.60% 0.80% 0.52% 0.40% 0.60% 0.49% 0.38% 0.39% 0.38% 0.20% 0.40% 0.03% (0.01)% (0.01)% 0.01% 0.00% 0.20% 12/31/21 03/31/22 06/30/22 09/30/22 12/31/22 Q4 2021 Q1 2022 Q2 2022 Q3 202
Slide 38: Revenue Diversification
Revenue Diversification • Noninterest income sources comprised approximately 14.6% of total operating revenue during Q4 2022; provides stable revenue stream • Q4 2021 Noninterest income included $5.2 million from the sale of branches as part of optimization initiative Total Revenue - Five Quarter Tr
Slide 39: Net Income and Adjusted Net Income – Last 5 Quarters
Net Income and Adjusted Net Income(1) – Last 5 Quarters Net Income Adjusted Net Income (1) $ in 000's $ in 000's $8,000 $8,000 $6,965 $6,000 $6,000 $4,152 $4,086 $3,929 $4,000 $4,000 $3,619 $3,047 $3,059 $2,843 $2,000 $2,000 $275 $118 $0 $0 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q4 2021 Q1 2022 Q2
Slide 40: EPS - Diluted and Adjusted EPS - Diluted – Last 5 Quarters
EPS - Diluted and Adjusted EPS - Diluted(1) – Last 5 Quarters EPS - Diluted Adjusted EPS - Diluted (1) 1.50 1.50 1.31 1.25 1.25 1.00 1.00 0.81 0.80 0.77 0.75 0.75 0.71 0.58 0.59 0.53 0.50 0.50 0.25 0.25 0.02 0.05 0.00 0.00 (0.25) (0.25) Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q4 2021 Q1 2022 Q2 2022
Slide 41: Net Interest Margin (FTE)
Net Interest Margin (FTE)(1) 4.50% 4.04% 4.00% 3.68% 3.50% 3.32% 3.37% 3.17% 3.46% 3.30% 3.00% 3.13% 3.10% 2.96% 2.50% 2.00% 1.50% 1.00% 0.86% 0.57% 0.50% 0.31% 0.33% 0.36% 0.00% Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Yield on Earning Assets Net Interest Margin (FTE) Cost of Funds (1) Net Interest
Slide 42: Adjusted Efficiency Ratio
Adjusted Efficiency Ratio(1) 75.00% 69.73% 70.00% 65.88% 65.00% 64.18% 63.02% 60.74% 60.00% Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 (1) Refer to Non-GAAP Financial Measures in the Appendix for the calculation of the measure and reconciliation to the most comparable GAAP measure. Efficiency Ratio (GA
Slide 43: Adjusted ROAA and Adjusted ROAE
Adjusted Return on Average Assets – ROAA(1) Adjusted Return on Average Equity – ROAE(1) 1.30% 16.00% 15.01% 1.20% 1.15% 14.00% 1.10% 1.03% 12.53% 1.00% 12.00% 0.90% 0.87% 0.80% 10.00% 0.76% 9.54% 0.70% 8.55% 8.00% 0.60% 0.50% 6.00% 0.40% 4.00% 0.30% 0.20% 2.00% 0.10% 0.08% 0.93% 0.00% 0.00% Q4 2021
Slide 44: Strong Capital Ratios (Community Bank)
Strong Capital Ratios (Community Bank) December 31, 2020 December 31, 2021 December 31, 2022 14.00% 13.58% 13.04% 13.18% 12.33% 12.33% 12.00% 11.79% 11.95% 11.79% 11.95% 10.00% 8.66% 8.00% 7.81% 7.76% 6.00% 4.00% 2.00% 0.00% Common Equity Tier 1 Capital (to Risk Tier 1 Capital (to Risk Weighted Asse
Slide 45: Concluding Thoughts
Concluding Thoughts ◦ Intense focus on sales and service culture which builds full relationships with our customers ◦ Utilize technology investments to enhance speed of process while improving customer experience ◦ Enhance profitability and efficiency potential while continuing to invest for future
Slide 46: Contact Information
Contact Information Company Contact John H. Montgomery President and Chief Executive Officer Phone: (724) 225-2400 NASDAQ Global Market: CBFV Investor Relations 100 N. Market Street Jeremy Hellman, CFA Carmichaels, PA 15320 Phone: (212) 836-9626 Phone: (724) 966-5041 Email: jhellman@equityny.com Fax
Slide 47: Appendix
Appendix
Slide 48: Selected Consolidated Financial Information
Selected Consolidated Financial Information (Dollars in thousands) (Unaudited) Selected Financial Condition Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 ASSETS Cash and Due From Banks $ 103,700 $ 122,801 $ 81,121 $ 123,588 $ 119,674 Securities 190,058 193,846 213,505 231,097 224,974 Loans Held for
Slide 49: Quarterly Income Statements
Quarterly Income Statements (Dollars in thousands) (Unaudited) Three Months Ended Year Ended Selected Operating Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Interest and Dividend Income Loans, Including Fees $ 11,835 $ 10,815 $ 9,733 $ 9,551 $ 9,904 $ 41,933 $ 39,704 Securities:
Slide 50: Per Common Share Data
Per Common Share Data Three Months Ended Year Ended Per Common Share Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Dividends Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.96 $ 0.96 Earnings Per Common Share - Basic 0.81 0.77 0.02 0.59 1.32 2.19 2.15 Earnings Per Common S
Slide 51: Selected Financial Ratios / Asset Quality Ratios / Capital Ratios
Selected Financial Ratios / Asset Quality Ratios / Capital Ratios Three Months Ended Year Ended Selected Financial Ratios (2) 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Return on Average Assets 1.16 % 1.12 % 0.03 % 0.87 % 1.87 % 0.80 % 0.79 % Adjusted Return on Average Assets (Non-G
Slide 52: Average Balances and Yields
Average Balances and Yields Three Months Ended December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Balance Dividends Cost (
Slide 53: Non-GAAP Financial Measures: Adjusted Net Income, Adjusted EPS and Adjusted ROAA
Non-GAAP Financial Measures: Adjusted Net Income, Adjusted EPS and Adjusted ROAA Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 12/31/20 12/31/19 (Dollars in thousands, except share and per share data) (Unaudited) Net Income (GAAP) $ 4,152 $ 3,929 $ 118 $ 3
Slide 54: Non-GAAP Financial Measures: Adjusted Net Income, Adjusted EPS and Adjusted ROAE
Non-GAAP Financial Measures: Adjusted Net Income, Adjusted EPS and Adjusted ROAE Three Months Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 (Dollars in thousands) (Unaudited) Net Income (GAAP) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 Adjustments (Gain) Loss on Securities (83) 46 199 7 (44) (Gain) on
Slide 55: Non-GAAP Financial Measures: Tangible Common Equity and Tangible Book Value per Share
Non-GAAP Financial Measures: Tangible Common Equity, Tangible Book Value per Share and Tangible Common Equity to Tangible Assets 12/31/22 12/31/21 12/31/20 12/31/19 (Dollars in thousands, except share and per share data) Stockholders' Equity (GAAP) $ 110,155 $ 133,124 $ 134,530 $ 151,097 Goodwill an
Slide 56: Non-GAAP Financial Measures: Return on Average Tangible Common Equity
Non-GAAP Financial Measures: Return on Average Tangible Common Equity Three Months Ended Year Ended 12/31/22 12/31/21 12/31/22 12/31/21 12/31/20 12/31/19 (Dollars in thousands) Net Income (Loss) (GAAP) $ 4,152 $ 6,965 $ 11,247 $ 11,570 $(10,640) $ 14,327 Amortization of Intangible Assets, Net 446 44
Slide 57: Non-GAAP Financial Measures: Net Interest Rate Spread (FTE) and Net Interest Margin (FTE)
Non-GAAP Financial Measures: Net Interest Rate Spread (FTE) and Net Interest Margin (FTE) Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 12/31/20 12/31/19 (Dollars in thousands) Interest Income per Consolidated Statement of Income (GAAP) $ 13,855 $ 12,287 $
Slide 58: Non-GAAP Financial Measures: Adjusted Efficiency Ratio
Non-GAAP Financial Measures: Adjusted Efficiency Ratio Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 12/31/20 12/31/19 (Dollars in thousands) Efficiency Ratio (GAAP) Noninterest expense (GAAP) $ 8,998 $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 34,891 $ 42,862 $ 56,
Slide 59: Non-GAAP Financial Measures: Core Earnings
Non-GAAP Financial Measures: Core Earnings (1) Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Interest Income (GAAP) $ 13,855 $ 12,287 $ 10,958 $ 10,616 $ 10,963 $ 10,786 Noninterest Income (GAAP) 2,360 2,739 2,105 2,613 8,689 2,198 (Gain) loss on securities (83) 46 199 7 (44) (24) (Gain) on sale o
Slide 60: Non-GAAP Financial Measures: Pre-Tax Pre-Provision Return on Average Assets
Non-GAAP Financial Measures: Pre-Tax Pre-Provision Return on Average Assets Three Months Ended Year Ended 12/31/22 12/31/21 12/31/22 12/31/21 12/31/20 12/31/19 (Dollars in thousands) Net Income (Loss) Before Income Tax Expense (Benefit) (GAAP) $ 5,228 $ 8,873 $ 14,080 $ 14,695 $ (9,392) $ 16,056 Pro
Slide 61: Non-GAAP Financial Measures: Allowance for Loan Losses, Excluding PPP Loans
Non-GAAP Financial Measures: Allowance for Loan Losses, Excluding PPP Loans 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 (Dollars in thousands) Allowance for Loan Losses $ 12,819 $ 12,854 $ 12,833 $ 11,595 $ 11,582 Total Loans $1,049,873 $1,042,942 $1,027,969 $1,020,642 $1,020,796 PPP Loans (126) (768)
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